UCLA Sees 16% home-price gain in 2010

Double-digit housing appreciation will return to Orange County next year, with the median home price rising somewhere from 15.9% to 16.6%, UCLA economists forecast in a report released today. Click on charts above to enlarge!

That compares to a projected 8.8% gain in California next year and a 2.4% increase nationwide.

It also differs sharply from Cal State Fullerton’s outlook. An economist there said Tuesday that Orange County home prices will rise 2% to 3% next year – at most.

But Mark Schniepp, author of UCLA Anderson Forecast for Orange County, said he’s not predicting the return of the housing bubble.

Even after six years of appreciation, UCLA economists still don’t expect home prices to reach the 2006 peak. In fact, home prices likely won’t get back to that level again until 2016 or 2017, Schniepp said.

“We’re already at 16% (appreciation) from March. That’s just six months, and I’m talking about a year-over-year (change),” said Schniepp, chief economist with the California Economic Forecast. “When you have a cycle where you’ve overcorrected, you can go up 16%. It doesn’t really mean much.

The gist of the forecast, Schniepp said, is that the Orange County housing market is in recovery.

“The train has left the station. It’s going down the track. This isn’t a head fake,” he said.

He added: “Now is the time to buy. (Actually), the time to buy was the spring and early summer.”